How to Spring Clean Your Finances in 2018

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Updated for 2019!

Spring is on the horizon, the trees are starting to come alive, and flowers are going to bloom. Forget the lingering winter temperatures (and snow), all is well with the world again!

You may not know this, but sometimes I feel like I’m supposed to be a poet! 😉

As you come out of hibernation and start planning to clean up your house and yard, consider spring cleaning your finances as well.

Here are a few suggestions for your financial spring clean-up this 2019:

1. Taxes

If you have waited till spring to file your taxes, it’s time to get off your butt and send in your tax return.

For most Canadians, the deadline for income tax and benefit returns for the 2018 tax year is on April 30, 2019. For our neighbours down south (U.S.), the filing deadline is also April 15, 2019. Self-employed individuals in Canada have until June 15, 2019.

If you file your taxes late and have a balance owing to the government, you will be hit with a penalty fee that’s equal to 5% of taxes you owe plus an additional 1% for every month your return is late, up to a year.

If you are consistently filing your taxes late, your penalty fee almost doubles.

Tax time is also a good time to look closely at your withholding. If you are getting a large tax refund, you should consider adjusting your taxes withheld at source to limit the interest-free loan you are providing to the government.

2. Review Your Debt

Take a closer look at your debts and review your plan for debt freedom.

Categorize your debt into high and low-interest and consider paying off high-interest debt (e.g. credit cards) first. If you have lots of credit card debt, spring is a good time to consider consolidating them and obtaining a much cheaper balance transfer credit card, line of credit, or personal loan.

4. Audit Your Spending

In addition to making a budget, you should audit where and how your money is being spent. I generally prefer to earn more money and not have to squeeze a cent here and there, but sometimes, cutting expenses is the easier/only option.

Take a look at your expenses over the last year and identify areas where savings could be made.

For instance, are there subscriptions you could cancel – magazines you never read, gym membership you do not use, expensive cable service you can downgrade?

Tracking your spending on an ongoing basis makes auditing and keeping to your budget a breeze.

Paytm (Canada): Pay your bills and earn cash back while doing so. You can access all your bills in one place, get due dates, reminders, use multiple payment methods, and send money to friends and family across Canada for free.

With the Paytm app, you get rewarded for paying your bills and when you introduce friends to the app and they use your referral code, you both get rewarded. For example, if you use my referral code (PTM2477287) when you sign-up, you and I each get $10 in rewards. WIN-WIN! Even better, the app is FREE.

5. Automate Savings, Investing, and Bill payments

Good intentions (of saving, investing and paying your bills) are not enough and your memory may not always serve you well.

To meet your savings and investing goals, automate the withdrawals from your bank accounts and you won’t need to remember. 🙂

Consider scheduling withdrawals to align with your paydays, so your automated payments do not bounce and leave you stuck with another bill!

Automatic savings apps you should consider include:

Mylo (Canada): This app automatically saves and invests your spare change in a personalized and diversified portfolio using low-cost ETFs. This is one way to build wealth without any radical changes to your lifestyle. Sign up and receive a $5 bonus.

Digit (U.S.): This app analyzes your spending and automatically saves the perfect amount every day so you can meet your financial goals stress-free. Sign up here!

KOHO (Canada): This app offers you a new way to bank. You earn cash back on all your debit purchases, save automatically, and pay no monthly bank fees. Sign up here and enter the promo code FREEDOM20 for up to a $60 welcome bonus.

6. Monitor Your Credit Score

Cyber thieves are always on the prowl looking to steal your identity and money. To stop them, you need to continually ensure you are protecting your personal and financial information.

Monitor your credit score and report free of charge and watch out for any red flags on your credit profile. If someone obtains a credit facility (e.g. credit card, loan, line of credit) in your name, it should show up on your credit report and your credit score normally takes a hit.

Checking your credit score literally takes five minutes or less of your time.

7. Organize Your Finances

There is no better time to organize your finances than springtime.

Do you have all those bank statements, bills, receipts, you received over the last year all jumbled together? It’s time to put them in order so you can easily access specific documents when needed, and not miss important deadlines. You may also need them for your tax return filing.

If you don’t have a filing cabinet, consider purchasing one.

Have paperwork that’s no longer useful? Shred them and reduce the clutter. Consider switching to paperless statement and bills.

8. Review Your Investments

What’s going on with your investments? “Buy and Hold” is great advice, but you should still take a look at your investment portfolio at least once every year to ensure all is well.

What’s your portfolio performance?

Do you need to consolidate investment accounts for efficiency, less paperwork, and lower fees?

Great tips! I’m a huge fan of automating savings, in the form of automating deposits to an investment account with a robo-adviser. When you don’t have to take the decision to transfer the money every month, I think you’re far less likely to stop doing so.

Great tips! I have not heard about the Encircle app. Will check it out.

Speaking of home insurance…there was a joint gap in my laminate flooring in the middle of the entryway the other day, I think from the humidity/cold temperature outside or my husband resting his bike on my floor haha…It was pretty big, about 6mm.

Then I called my home insurance to see if it would be covered. They said my deductible is $500.

I was worried it would cost thousands, to replace all the flooring. My husband went to Home Depot and came back with no tool to help fix it except a recommendation to go somewhere else for a tool.

Then I consulted Google and saw you could use a running shoe to kick it back in.

@GYM: It’s a wonder how much you can save by just putting in a little effort to find a solution or alternative. I honestly think Google is awesome, and combining it with Youtube has been a life saver when it comes to doing DIY around our house. Imagine the simple solution you found online!

I try to keep the home insurance as last resort…I hear once you start having claims, your premium tends to get revised upwards.